How did Newton go bankrupt??

1. Stocks = All-time highs
2. Gold = All-time highs
3. Silver = All-time highs
4. Copper prices = All-time highs
5. Money Market Funds = All-time highs
Everything hit record highs at the same time.
Global markets continued to strengthen, and everyone was shouting about the second half of the bull market, as if gold was everywhere.
But the more excited the market, the more cautious we should be. Today, let’s take a look at how Newton went bankrupt.

He’s the man who discovered gravity, the father of physics, one of the greatest scientists in human history, bar none.

This genius, whose IQ surpasses all, was also a “leek” (retail investor) in the stock market, and lost badly.

The story goes back to 1720 in England.

At that time, there was a company called the South Sea Company, which had obtained a royal charter from the British government to trade with South America.

Imagine South America, full of gold and silver—what an incredible imagination!

Plus, the company had government backing, responsible for managing national debt—basically today’s “China National” + “AI leader” combo.

The entire UK went crazy.

From nobles to commoners, everyone was trading stocks, with one belief: buy South Sea, get rich quick!

The South Sea Company’s stock price skyrocketed. From 128 pounds at the start of the year, it soared to over 1,000 pounds by summer—almost an 8-fold increase in six months!

Our Sir Newton was already 77 years old at the time, serving as the Master of the Royal Mint, a high-net-worth individual.

He was caught up in this frenzy too.

Initially, Newton’s moves were considered perfect.
When the market was still relatively calm, he invested 7,000 pounds. After the stock doubled, he sensed some risk and sold decisively, earning 7,000 pounds—100% return.

See, a genius is a genius—he not only understands science but also knows when to take profits.

If the story ended here, it would be a beautiful tale of “scientist making easy profits in the stock market with wisdom.”

But human nature is the devil.

What happened after Newton sold?
The South Sea stock didn’t stop; in fact, it surged even more!

His friends and colleagues who hadn’t sold saw their wealth change daily. Today they bought a mansion, tomorrow a manor.

Every day, someone would tell him: “You sold too early! It’s already up to 800 pounds!” “It’s heading for 1,000! How much did you miss out on?”

Sound familiar?

It’s that feeling when the stock you sold jumps the next day, keeps rising—like a knife stabbing your heart, making you feel like a fool.

The anxiety of missing out is more tormenting than losses.
Even a genius like Newton couldn’t withstand it.

At the market’s most feverish peak, when the stock price broke 1,000 pounds, he came back in!

And this time, he almost bet his entire fortune—about 20,000 pounds.

What does 20,000 pounds mean?

It was an astronomical sum at the time, equivalent to his entire ten years’ salary as the Master of the Mint, earned without eating or drinking.

The story that followed is well known.
The bubble, after all, is just a bubble.

Shortly after Newton heavily invested again, the UK Parliament passed the “Bubble Act,” aimed at cracking down on speculative companies. Panic spread instantly, and South Sea’s stock plummeted, falling back below 100 pounds by year’s end.

Countless people lost everything, and Newton, who had just made a profit, lost it all again, including a huge principal.

After this episode, Newton left a famous quote:
“I can calculate the orbits of planets, but I cannot predict human madness.”

There’s nothing new under the sun.

Today’s markets, with advanced technology, tools, and faster information transmission, are far more developed than Newton’s era.

But the underlying code that drives market sentiment has never changed: greed and fear.
Especially the fear of missing out.

Just like now, many people might be getting restless again, wanting to go all-in, trying to quickly recover the small gains they made in the past few months.

Before you press “buy,” think of Newton.

Even he, with a divine-level brain, couldn’t judge the short-term top and bottom of the market, nor stay absolutely rational in a frenzy. What makes ordinary people think they can?

What I want to say is, the more confident you are in the market, the more you should prioritize risk management.

And for ordinary investors, the simplest and most effective way to control risk is to control your position size!

Position size is your chips at the table—never go all-in on one hand.

When market sentiment is high and everyone is talking about stocks, what you should do is not rush in, but check if your position is too heavy. If necessary, reduce some, lock in part of your profits.

No matter how optimistic you are about a direction or how certain you are about an opportunity, always leave some cash in your account.

This money is your confidence, your “ammo” to buy more during downturns, and the guarantee that you can sleep peacefully at night.